October 19, 2017
The operating models of equipment manufacturers are in the midst of a huge transformation. The industry is rapidly moving from a pure product focus to a customer outcome-based focus. With this change, every equipment manufacturer will be faced with the hard truth that their customers are also changing the way they purchase. New customer expectations, new models, and new capabilities will put tremendous pressure on today’s field services organization to adapt, be relevant, and continue to deliver a key revenue stream for their company.
This transformation will impact every aspect of a company, including traditional service lines of business like Support, Professional, Education, and Field Services. These service organizations will need new capabilities to be relevant in the future while they continue to deliver today’s results. Let’s take a stroll along the customer journey of the future.
Given the importance of service revenue in an outcome-based world, alignment and coordination among Sales, R&D, and Professional Service organizations are critical in getting the value proposition, configuration, and installation right. With over 70% of Field Services organizations struggling with profitable revenue growth, Service Marketing and Field Services will work together to create differentiated offers that move beyond cost plus to value-based pricing.
Next, field service engineers are part of the Professional Services project team that configures and installs custom solutions. Product teams enable the products to be smart and connected to supply the data that can be used for the development of outcome-based solutions.
Speaking of data, collecting data from a large install base enables some great things to happen. We anticipate the digital twin that is stored in the Cloud will deliver more value than the physical component itself. For instance, building digital value chain data models to enable predictive and proactive support will improve the cost and efficacy of service events.
At TSW this year, we have a significant number of data analytics, artificial intelligence, and machine learning sessions that go over this concept in more detail.
Get the right person, with the right skills, and the right parts on customer location in a timely manner to cost-effectively resolve the incident in one visit.
Even with all this talk of transformation, Field Service must continue to deliver on its main charter: Get the right person, with the right skills, and the right parts on customer location in a timely manner to cost-effectively resolve the incident in one visit.
But let’s face it, while on-site incidents are a necessary evil, the only reason field service engineers (FSEs) are on-site today is because something broke. So the question is, how can Field Services organizations go from low value-add repair work to helping customers improve their processes and achieve their outcomes? From our TSIA Field Service Benchmark, we know that FSEs resolve between 2-3 incidents per day. That’s 40-60 incidents per month where they see both good and bad implementations. This puts the FSE in a unique position to identify process optimization and improved business outcome opportunities.
Combining these insights with their “trusted advisor” status, the FSEs are able to unlock new revenue opportunities. The emerging field services adoption and consumption practices that will become more commonplace in the future include: capturing customer best practices to replicate at other customer sites, providing information regarding newly-released features, soliciting desired enhancements from the customer, and assessing the customer's utilization of products. These four practices have been shown to increase renewal rates by up to 7 points, bringing millions in additional annual recurring revenue (ARR) to the company.
Further, many managed service offerings have their origin in field service engineers that have become an integral part of customer operations. They become dedicated resources to one or a few customer locations and then they expand their capabilities to provide multi-vendor services.
Field service engineers make over 40 customer visits per month. In the future ARR world, increasing consumption is a matter of survival, and field service engineers have the relationship, context, personalization, and immediacy.
As equipment manufacturers grapple with this future customer journey, one question keeps popping up: Should Field Services personnel move beyond their traditional break/fix charter and take an active role in selling and growing the account? There are some that believe that this somehow compromises an FSE’s trusted advisor status, but I would say that you shouldn’t believe that for a second. Helping the customer achieve better outcomes actually enhances the FSE’s status as a trusted advisor. In order to provide outstanding service, FSEs have a responsibility to promote the benefits of the product, demonstrate how to use it better, and to help customers achieve better outcomes.
Field service engineers make over 40 customer visits per month. In the future ARR world, increasing consumption is a matter of survival, and field service engineers have the relationship, context, personalization, and immediacy. So, the real question is, who is in a better position to cross-sell and deepen the relationship than the services organization?
The time is now for Field Services to embrace this new customer journey.
Read more posts in the "Art and Science of the Customer Journey" blog series:
Organizational capabilities that technology services businesses must master
Vele Galovski is vice president of research, Field Services, for TSIA. Using his nearly 30 years of industry experience, he has consistently helped companies both large and small drive double-digit top-line growth with a proven retain, gain, and grow strategy. Vele has also written a book, The Perpetual Innovation Machine, which describes a holistic approach to management based on ambitious goal setting, data driven analysis, skillful prioritization, inspiring leadership, and the lost art of employee engagement.
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